Alternative Investment Market (AIM) listed mining and exploration junior Premier African Minerals Limited has announced a £1.575 million (approximately US$ 2,096,797.48 million today’s rate) interim funding to bolster the final commissioning and optimisation of its flagship Zulu Lithium and Tantalum Project in Fort Rixon, Mining Zimbabwe can report.
By Rudairo Mapuranga
The subscription, issued at 0.035 pence per new ordinary share, comes at a critical time for Premier, following recent positive developments with its offtake partner, Canmax Technologies Co., Ltd. According to Premier, the funds raised will be primarily directed towards completing the secondary flotation plant at Zulu, commencing associated civil works, settling essential creditors, and providing working capital for ongoing operations.
Premier CEO George Roach said the move would help restore confidence in the company, following the amendment to the Offtake and Prepayment Agreement with Canmax and the receipt of a non-binding letter of interest from a reputable buyer for future development.
“The recently announced amendment to the Offtake and Prepayment Agreement with Canmax, the provision of a non-binding letter of interest, and the alleviation of concerns related to the long stop date all help restore confidence in Premier, and this should help support us through the next three months while we complete the spodumene flotation section at Zulu,” Roach said.
The subscription will see the issue of 4.5 billion new ordinary shares, arranged within Premier’s remaining share authorities. The new shares will be admitted to trading on AIM around May 1, 2025, and will rank pari passu with existing ordinary shares. Following the subscription, Premier’s issued share capital will stand at approximately 50.97 billion shares, with the company now having fully utilised its current share issuance authorities.
Background: Premier’s Strengthened Partnership with Canmax
Premier’s interim funding announcement follows a series of critical developments regarding its relationship with Canmax Technologies, one of its primary strategic partners. In late March, Premier secured an amendment to the original Offtake and Prepayment Agreement signed with Canmax, extending the Long Stop Date from April 1, 2025, to the earlier of December 31, 2025, or upon securing a new reputable buyer acceptable to Canmax.
Key terms of the amendment include:
Participation Rights: Canmax retains rights to partial repayment in Premier’s shares, ensuring a 13.38% fully diluted shareholding after any future funding rounds.
Financial Oversight: Canmax will oversee operational and creditor budget management at both Premier and Zulu until the prepayment and accrued interest are fully settled.
Safeguards Against Insolvency: Neither Premier nor Zulu Lithium may enter insolvency without swift contestation or resolution.
Asset Protection: Premier cannot pledge or encumber its assets without prior Canmax approval.
Binding Interest Requirement: Premier must secure a non-binding letter of interest from a reputable buyer within 30 days, extendable at Canmax’s discretion.
Director Commitments: Premier’s directors are personally obligated to adhere to the amended agreement’s conditions until full settlement.
The relationship between Premier and Canmax was initially formalised in 2022 when Canmax provided an advance purchase of US$34.64 million to fund construction of the Zulu processing plant. However, Premier failed to meet minimum delivery obligations in November and December 2023, leading Canmax to enforce a higher interest rate of 12% per annum on the outstanding prepayment balance.
Despite these challenges, Canmax’s continued commitment to Zulu underscores its strategic importance. Premier has expressed gratitude for Canmax’s understanding and has reaffirmed its focus on delivering spodumene concentrate as soon as the plant’s commissioning is completed.
A Race Against Time at Zulu
Premier’s focus over the next three months will be squarely on completing the spodumene flotation circuit at Zulu. The company remains under pressure to not only meet the commissioning targets but also to secure long-term financial stability and creditor confidence, necessary for the project’s transition into a full-scale lithium producer.
The success of Zulu is critical not only for Premier but also for Zimbabwe’s ambition to become a key player in the global lithium supply chain. Zimbabwe, boasting some of the largest hard-rock lithium deposits globally, has witnessed a surge in lithium investments, and Zulu remains among the most strategically important projects under development.
As the global energy transition drives unprecedented demand for lithium, Premier’s ability to execute on Zulu could position it at the forefront of Zimbabwe’s critical mineral revolution. With the latest funding secured and a strengthened partnership with Canmax, the coming months will prove decisive for Premier African Minerals.
